Reverse mortgages can trigger foreclosure when the borrower dies, moves out for 12+ months, or falls behind on property taxes or insurance. Learn how HECM foreclosure works, what heirs can do, and how to stop reverse mortgage foreclosure at every stage.
Unlike traditional mortgages, a reverse mortgage (HECM) has no monthly payments — but it can still trigger foreclosure. The HECM becomes due and payable when a triggering event occurs. Unlike traditional foreclosure, the borrower isn't missing payments — they're missing obligations like taxes, insurance, or occupancy.
The most common trigger. When the last surviving borrower dies, the HECM becomes due. Heirs typically have 30 days to notify the lender and 6 months (extendable to 12) to satisfy the loan.
If the borrower leaves the home for more than 12 consecutive months (nursing home, assisted living, or relocation), the loan becomes due.
Falling behind on property taxes is the most common non-death trigger. The HECM servicer can call the loan due or pay the taxes and add them to the loan balance.
Failure to maintain homeowners insurance triggers default. The servicer may force-place expensive insurance — often 2-10x the cost of standard coverage — or foreclose.
The borrower must keep the property in reasonable condition. Significant deterioration can trigger foreclosure.
If a non-borrowing spouse isn't on the loan, they may face eviction after the borrowing spouse dies — though HUD rules now offer some protection.
Death, move-out, tax default, or insurance lapse. The lender must be notified. For death: heirs have 30 days to notify the servicer.
The servicer sends notice that the loan is due. This triggers the timeline for repayment, sale, or foreclosure.
Heirs can sell the property, pay off the loan (typically 95% of appraised value), or seek a deed-in-lieu. Extensions up to 12 months available. This is when to act.
If no resolution, the lender forecloses. The process varies by state (judicial vs. non-judicial). HUD's pre-foreclosure review process provides additional time.
Notify the servicer within 30 days. Send a death certificate and your contact information.
Decide: keep or sell? To keep the home, pay 95% of the appraised value or the full loan balance — whichever is less. If the loan exceeds value, FHA insurance covers the difference.
Request extensions. HUD allows up to two 90-day extensions (6 months total) and sometimes up to 12 months with HUD approval.
Deed-in-lieu. If the loan balance exceeds the home's value, a deed-in-lieu avoids foreclosure and protects the heirs' credit.
Contact us. We negotiate with reverse mortgage servicers daily and can help heirs navigate the process. Free consultation →
Heirs: you have options. Borrowers: tax issues can be resolved. Call before the foreclosure starts.